IRAN SANCTIONS ACT: MALAYSIA RECEIVES USG MESSAGE

C O N F I D E N T I A L KUALA LUMPUR 000042 SIPDIS SIPDIS E.O. 12958: DECL: 01/15/2018 TAGS: PREL ETTC EPET ENRG IR MY SUBJECT: IRAN SANCTIONS ACT: MALAYSIA RECEIVES USG MESSAGE ON SKS INVESTMENT REF: A. 07 STATE 171189 ¶B. 07 KUALA LUMPUR 618 ¶C. 07 KUALA LUMPUR 61 Classified By: Political Section Chief Mark D. Clark, reason 1.4 (b and d). ¶1. (C) Political Section Chief on January 15 delivered ref A demarche, concerning the Malaysian group SKS's reported $16 billion agreement to develop Iran's Golshan and Ferdows gas fields, to the Malaysian Foreign Ministry's Under Secretary for Disarmament Bala Chandran Tharman, who also is acting Under Secretary for UN and Multilateral Political Affairs. Polchief emphasized the need to avoid actions that undermine diplomatic pressure on Iran to comply with UNSC and IAEA requirements, and recalled the Embassy's earlier demarches (refs B, C) regarding the SKS deal with Iran. Bala Chandran acknowledged the news of SKS's investment decision, and stated that Malaysia's position had not changed. UN sanctions did not cover investments in Iran's oil and gas sector, and companies from many nations were engaged in such business with Iran. The Malaysian government had no basis to intervene or prevent Malaysian firms from reaching these business deals in Iran. Likewise, the Foreign Ministry would not assist in arranging a meeting with SKS; the Embassy should contact the company directly, and SKS would decide whether to meet with U.S. officials. Bala Chandran added that he thought SKS was well aware of U.S. sanctions laws, including the Iran Sanctions Act. ¶2. (SBU) Econ Counselor delivered the same demarche on January 15 to Dr. Sulaiman Mahbob, the Director General of the Prime Minister's Economic Planning Unit (EPU),which has oversight responsibility for energy sector issues in Malaysia. Dr. Sulaiman understood our points, but said that he had no further information regarding SKS's reported deal with Iran and did not see a role for his office in this matter. He referred us to the Foreign Ministry. KEITH